First BanCorp. Announces Earnings for the Quarter Ended March 31, 2016

2016 First Quarter Highlights and Comparison with 2015 Fourth Quarter

Net income of $23.3 million, or $0.11 per diluted share, compared to
$15.0 million, or $0.07 per diluted share, for the fourth quarter of
2015.

Adjusted net income of $25.8 million, excluding unusual and/or
non-recurrent items which are identified below, compared to adjusted
net income of $15.1 million for the fourth quarter of 2015.

Adjusted pre-tax, pre-provision income of $52.6 million, compared to
$50.6 million for the fourth quarter of 2015.

Net interest income decreased by $0.6 million to $124.6 million,
primarily driven by the impact of lower consumer loan average
balances, partially offset by the benefit of the increase in
short-term interest rates on commercial loans and cash balances
deposited with the Federal Reserve Bank.

Provision for loan and lease losses decreased by $12.6 million to
$21.1 million, compared to $33.6 million for the fourth quarter of
2015, driven primarily by the net impact in the prior quarter of the
$19.2 million charge related to qualitative factor adjustments to the
reserves for the exposure to commercial loans granted to or guaranteed
by the Puerto Rico Government and the $8.1 million reserve release for
construction loans.

Non-interest income of $18.5 million ($20.9 million excluding unusual
and/or non-recurring items) compared to $23.2 million ($19.2 million
excluding unusual and/or non-recurring items) for the fourth quarter
of 2015. The increase in adjusted non-interest income was primarily
driven by seasonal contingent commissions received by FirstBank
Insurance Agency.

Non-interest expenses of $93.0 million compared to $96.0 million
($93.8 million excluding unusual and/or non-recurring items) for the
fourth quarter of 2015.

Credit quality variances:

Non-performing assets increased in the quarter by $127.3 million,
to $737.2 million as of March 31, 2016, primarily attributable to
the $128.6 million exposure to commercial loans guaranteed by the
Puerto Rico Tourism Development Fund (“TDF”) which were placed on
non-accrual status in the first quarter. Excluding the $128.6
million exposure to loans guaranteed by the TDF, non-performing
assets decreased by $1.2 million compared to the prior quarter.

Non-performing loan inflows amounted to $177.3 million. Excluding
the $128.6 million exposure to loans guaranteed by the TDF,
non-performing loan inflows increased by $6.8 million to $48.8
million compared to inflows of $42.0 million in the fourth quarter
of 2015.

Net charge-off rate of 1.03% compared to 0.95% for the fourth
quarter of 2015. Net charge-offs have remained stable over the
past three quarters.

Total deposits, excluding brokered certificates of deposit (“CDs”) and
government deposits, increased in the quarter by $137.1 million to
$6.8 billion as of March 31, 2016, primarily reflecting increases in
demand deposits and savings in both Puerto Rico and the Virgin Islands
regions.

Brokered CDs decreased in the quarter by $91.2 million to $2.0 billion
as of March 31, 2016.

Government deposits increased in the quarter by $50.7 million to
$628.0 million as of March 31, 2016 reflecting higher balances in both
Puerto Rico and the Virgin Islands regions.

Total loans decreased in the quarter by $140.5 million to $9.2 billion
as of March 31, 2016, primarily reflecting lower commercial and
consumer loan balances, including the repayment of two large loans
totaling approximately $94.3 million.

Total loan originations, including refinancings, renewals and draws
from existing commitments (excluding credit card utilization
activity), of $645.4 million for the first quarter of 2016, compared
to $786.3 million for the fourth quarter of 2015. The decrease
reflects reduced activity in all major loan categories, primarily in
Puerto Rico.

As of March 31, 2016, the Corporation had $340.5 million of direct
exposure to loans and obligations of the Commonwealth of Puerto Rico
central government and instrumentalities, of which $199.3 million, or
59%, represented exposure to municipalities, compared to $360.7
million as of December 31, 2015.

Total capital, common equity Tier 1 capital, Tier 1 capital, and
leverage ratios calculated under the transition provisions of Basel
III rules of 20.17%, 16.60%, 16.60%, and 12.20%, respectively, as of
March 31, 2016. Tangible common equity ratio of 13.13% as of March 31,
2016.

April 25, 2016 04:45 PM Eastern Daylight Time

SAN JUAN, Puerto Rico--(BUSINESS WIRE)--First BanCorp. (the “Corporation”) (NYSE: FBP), the bank holding company
for FirstBank Puerto Rico (“FirstBank” or “the Bank”), today reported
net income of $23.3 million for the first quarter of 2016, or $0.11 per
diluted share, compared to $15.0 million, or $0.07 per diluted share,
for the fourth quarter of 2015 and $25.6 million, or $0.12 per diluted
share, for the first quarter of 2015.

On a non-GAAP basis, adjusted net income (which excludes the unusual
and/or non-recurring items that are mentioned below) for the first
quarter of 2016 was $25.8 million compared to $15.1 million for the
fourth quarter of 2015 and $18.9 million for the first quarter of 2015.

The 2016 first quarter results included the following unusual and/or
non-recurring items:

A $6.7 million other-than-temporary impairment (“OTTI”) charge on debt
securities, including a $6.3 million OTTI on Puerto Rico Government
debt securities and a $0.4 million OTTI on private label
mortgage-backed securities. No tax benefit was recognized for the OTTI
charges.

A $4.2 million gain on the repurchase and cancellation of $10 million
in trust preferred securities, reflected in the statement of income
set forth below as “Gain on early extinguishment of debt.” The gain,
realized at the holding company level, has no effect on the income tax
expense for the first quarter.

The 2015 fourth quarter results included the following unusual and/or
non-recurring items:

A $7.0 million ($4.3 million after-tax) gain associated with a
long-term strategic marketing alliance entered during the fourth
quarter as part of the sale of FirstBank Puerto Rico merchant
contracts portfolio.

A $3.0 million OTTI charge on Puerto Rico Government debt securities.
No tax benefit was recognized for the OTTI.

Costs of $2.2 million ($1.4 million after-tax) related to a voluntary
early retirement program.

The 2015 first quarter results included the following unusual and/or
non-recurring items:

A $13.4 million ($8.2 million after-tax) bargain purchase gain on
assets acquired and liabilities assumed from Doral Bank and $2.1
million ($1.3 million after-tax) of related acquisition and conversion
costs.

The following table reconciles for the first quarter of 2016, and the
fourth and first quarters of 2015, the reported net income to adjusted
net income, a non-GAAP financial measure that excludes certain unusual
and/or non-recurring items affecting comparability:

Acquisition and conversion costs of loans and deposits assumed
from Doral Bank

-

-

1,272

Adjusted net income, excluding items affecting comparability

$

25,814

$

15,096

$

18,873

Aurelio Alemán, President and Chief Executive Officer of First BanCorp.,
commented: “We are quite pleased with our results for the first quarter.
We posted $23.3 million of net income or $0.11 per diluted share
compared to $15.0 million in the fourth quarter. On an adjusted basis
our net income was $25.8 million this quarter compared to $15.1 million
in the fourth quarter. Our pre-tax pre-provision income was $52.6
million, a $2.0 million increase compared to the fourth quarter. Our
tangible book value per share increased $0.19 to $7.66.

"We achieved improvement in most of our core metrics this quarter. Our
core deposits, net of government and brokered, grew nicely this quarter
to $6.8 billion, an increase of $137 million. Most of this growth
occurred in demand and savings account in Puerto Rico and the Virgin
Islands. We further reduced our reliance on brokered CDs by $91 million.
Loan originations and renewals including credit card activity reached
$731 million, we experienced a decline in our loan book in Puerto Rico,
with lower origination volumes in certain categories, a portion of this
decline is seasonal in nature. On the other hand, we continue to
increase our Florida loan book, which grew $54 million, or 5% compared
to the fourth quarter. We are very pleased with the opening of a new
branch on Brickell Avenue in Miami that will provide access to a new and
vibrant market for the Florida franchise. We also continue making
progress in our initiatives to lower our operating expenses.

"Despite these accomplishments, given the uncertainty around the
economic situation in Puerto Rico and the recently adopted moratorium
law, we made the decision to place our hotel commercial loan
relationships guaranteed by the Tourism Development Fund in nonaccrual
status. Excluding this negative migration, our asset quality would have
slightly improved, non-performing assets would have declined by $1.2
million. We remain cautiously optimistic that Puerto Rico and its
creditors will continue to work toward a resolution. We care deeply
about the outcome and will continue to be involved in the ongoing
discussions. Our strong capital position and diverse business model will
continue to drive results.”

This press release includes certain non-GAAP financial measures,
including adjusted net income, adjusted non-interest income, adjusted
non-interest expenses, adjusted pre-tax, pre-provision income, adjusted
net interest income and margin, certain capital ratios, and certain
other financial measures that exclude the effect of the gain on the
repurchase and cancellation of $10 million of trust preferred
securities, other-than-temporary impairment charges on debt securities,
the gain on the sale of merchant contracts, costs associated with the
voluntary early retirement program, the bargain purchase gain on the
acquisition of assets and assumption of deposits from Doral Bank and
acquisition and conversion costs related to the Doral Bank transaction,
and should be read in conjunction with the accompanying tables (Exhibit
A), which are an integral part of this press release.

RECENT EVENTS

Other-Than-Temporary Impairment on Puerto Rico Government Obligations

During the first quarter of 2016, the Corporation recorded a $6.3
million OTTI charge on three Puerto Rico Government debt securities held
by the Corporation as part of its available-for-sale securities
portfolio, specifically bonds of the Government Development Bank for
Puerto Rico (“GDB”) and the Puerto Rico Public Buildings Authority. This
is the third OTTI charge on these securities recorded since June 30,
2015, as OTTI charges of $12.9 million and $3.0 million were booked in
the second and fourth quarters of 2015, respectively. The credit-related
impairment loss estimate is based on the probability of default and
estimated loss severity in the event of default in consideration of the
latest available information about the Puerto Rico Government’s
financial condition, including the enactment of a debt moratorium law
and the declaration of a state of emergency at the GDB by the Puerto
Rico government. As of March 31, 2016, the Corporation owns Puerto Rico
Government debt securities in the aggregate amortized cost of $43.4
million (net of the $22.2 million OTTI aggregate charges taken on these
securities), recorded on its books at a fair value of $26.4 million.

Repurchase and Cancellation of Trust Preferred Securities

During the first quarter of 2016, the Corporation completed the
repurchase of $10 million in trust preferred securities of the FBP
Statutory Trust II that were auctioned in a public sale at which the
Corporation was invited to participate. The Corporation repurchased and
cancelled the repurchased trust preferred securities, resulting in a
commensurate reduction in the related Floating Rate Junior Subordinated
Debentures (the “subordinated debt”). The Corporation’s winning bid
equated to 70% of the $10 million par value. The 30% discount, plus
accrued interest, resulted in a gain of $4.2 million, which is reflected
in the statement of income set forth below as a “Gain on early
extinguishment of debt”. As of March 31, 2016, the Corporation still has
Floating Rate Junior Subordinated Debentures outstanding in the
aggregate amount of $216.2 million.

ADJUSTED PRE-TAX, PRE-PROVISION INCOME TRENDS

Adjusted pre-tax, pre-provision income is a non-GAAP financial measure
that management believes is useful in analyzing the Corporation’s
performance and trends. This metric is earnings adjusted to exclude tax
expense, the provision for loan and lease losses, gains or losses on
sales of investment securities and impairments, and fair value
adjustments on derivatives. In addition, from time to time, earnings are
adjusted also for items judged by management to be outside of ordinary
banking activities and/or for items that, while they may be associated
with ordinary banking activities, are so unusual that management
believes that a complete analysis of the Corporation’s performance
requires consideration also of results that exclude such amounts (for
additional information about this non-GAAP financial measure, see Basis
of Presentation - Adjusted Pre-Tax, Pre-Provision Income).

The following table reconciles income before income taxes to adjusted
pre-tax, pre-provision income for the last five quarters including
adjusted pre-tax, pre-provision income of $52.6 million in the first
quarter of 2016, up $2.0 million from the prior quarter:

Add: Non-recurring expenses for acquisition of loans/assumption of
deposits from Doral Bank

-

-

-

2,562

2,084

Add: Loss on a commercial mortgage loan held for sale and certain
other real estate owned (OREO) properties included in a bulk sale
of assets

-

-

-

802

-

Add: Voluntary early retirement program expenses

-

2,238

-

-

-

Add: Bulk sale of assets related expenses

-

-

-

918

-

Adjusted pre-tax, pre-provision income (1)

$

52,586

$

50,631

$

50,497

$

47,727

$

55,445

Change from most recent prior quarter-amount

$

1,955

$

134

$

2,770

$

(7,718

)

$

4,758

Change from most recent prior quarter-percentage

3.9

%

0.3

%

5.8

%

-13.9

%

9.4

%

(1) See "Basis of Presentation" for definition.

The increase in adjusted pre-tax, pre-provision income from the 2015
fourth quarter primarily reflected:

A $1.7 million increase in adjusted non-interest income of $20.9
million for the first quarter of 2016, as compared to adjusted
non-interest income of $19.2 million for the fourth quarter of 2015.
The increase was primarily related to a $2.0 million increase in
revenues from the insurance agency activities reflecting seasonal
contingent commissions received by the agency based on the prior
year’s production of insurance policies, partially offset by a $0.6
million decrease in fees from merchant transactions reflecting the
full quarter impact of the sale of merchant contracts completed in
late October 2015 and normal seasonal decline (a reduction of
approximately $0.4 million in processing costs, depreciation and other
expenses related to the sale of merchant contracts was reflected in
non-interest expenses). See Non-Interest Income section below
for additional information.

Adjusted non-interest income excludes the gain on the repurchase and
cancellation of trust preferred securities recorded in the first quarter
of 2016, the OTTI charges on debt securities recorded in the first
quarter of 2016 and fourth quarter of 2015, and the gain on sale of
merchant contracts recorded in the fourth quarter of 2015. See Basis
of Presentation section below for a reconciliation of this non-GAAP
financial measure to the corresponding GAAP measure.

A $0.8 million decrease in non-interest expenses of $93.0 million for
the first quarter of 2016, as compared to adjusted non-interest
expenses of $93.8 million for the fourth quarter of 2015. The decrease
mainly reflected a lower FDIC insurance premium assessment, an
increase in rental income on OREO properties, which is recorded as a
reduction to OREO operations expenses, and the aforementioned decrease
in costs related to the sale of merchant contracts. See Non-Interest
Expenses section below for additional information.

Adjusted non-interest expenses exclude costs incurred in the fourth
quarter of 2015 related to the voluntary early retirement program that
were considered non-recurring. See Basis of Presentation section
below for a reconciliation of this non-GAAP financial measure to the
corresponding GAAP measure.

NET INTEREST INCOME

Net interest income, excluding fair value adjustments on derivatives
(“valuations”), and net interest income on a tax-equivalent basis are
non-GAAP financial measures. See Basis of Presentation – Net Interest
Income, Excluding Valuations, and on a Tax-Equivalent Basisbelow
for additional information. The following table reconciles net
interest income in accordance with GAAP to net interest income excluding
valuations, and net interest income on a tax-equivalent basis for the
last five quarters. The table also reconciles net interest spread and
net interest margin on a GAAP basis to these items excluding valuations,
and on a tax-equivalent basis.

(Dollars in thousands)

Quarter Ended

March 31, 2016

December 31, 2015

September 30, 2015

June 30, 2015

March 31, 2015

Net Interest Income

Interest income - GAAP

$

150,831

$

151,640

$

149,812

$

151,632

$

152,485

Unrealized loss (gain) on

derivative instruments

4

5

(144

)

-

-

Interest income excluding valuations

150,835

151,645

149,668

151,632

152,485

Tax-equivalent adjustment

4,850

4,913

4,351

4,623

4,005

Interest income on a tax-equivalent basis excluding valuations

$

155,685

$

156,558

$

154,019

$

156,255

$

156,490

Interest expense - GAAP

26,183

26,427

24,883

25,155

26,838

Net interest income - GAAP

$

124,648

$

125,213

$

124,929

$

126,477

$

125,647

Net interest income excluding valuations

$

124,652

$

125,218

$

124,785

$

126,477

$

125,647

Net interest income on a tax-equivalent basis excluding valuations

$

129,502

$

130,131

$

129,136

$

131,100

$

129,652

Average Balances

Loans and leases

$

9,170,765

$

9,254,721

$

9,259,744

$

9,409,417

$

9,379,755

Total securities, other short-term investments and interest-bearing
cash balances

2,811,737

2,947,572

2,566,637

2,741,466

2,808,330

Average interest-earning assets

$

11,982,502

$

12,202,293

$

11,826,381

$

12,150,883

$

12,188,085

Average interest-bearing liabilities

$

9,396,257

$

9,663,626

$

9,414,184

$

9,768,667

$

10,042,209

Average Yield/Rate

Average yield on interest-earning assets - GAAP

5.06

%

4.93

%

5.03

%

5.01

%

5.07

%

Average rate on interest-bearing liabilities - GAAP

1.12

%

1.08

%

1.05

%

1.03

%

1.08

%

Net interest spread - GAAP

3.94

%

3.85

%

3.98

%

3.98

%

3.99

%

Net interest margin - GAAP

4.18

%

4.07

%

4.19

%

4.18

%

4.18

%

Average yield on interest-earning assets excluding valuations

5.06

%

4.93

%

5.02

%

5.01

%

5.07

%

Average rate on interest-bearing liabilities excluding valuations

1.12

%

1.08

%

1.05

%

1.03

%

1.08

%

Net interest spread excluding valuations

3.94

%

3.85

%

3.97

%

3.98

%

3.99

%

Net interest margin excluding valuations

4.18

%

4.07

%

4.19

%

4.18

%

4.18

%

Average yield on interest-earning assets on a tax-equivalent basis
and excluding valuations

5.23

%

5.09

%

5.17

%

5.16

%

5.21

%

Average rate on interest-bearing liabilities excluding valuations

1.12

%

1.08

%

1.05

%

1.03

%

1.08

%

Net interest spread on a tax-equivalent basis and excluding
valuations

4.11

%

4.01

%

4.12

%

4.14

%

4.13

%

Net interest margin on a tax-equivalent basis and excluding
valuations

4.35

%

4.23

%

4.33

%

4.33

%

4.31

%

Adjusted net interest income for the first quarter of 2016 amounted to
$124.6 million, excluding fair value adjustments on derivative
instruments of $4 thousand, a decrease of $0.6 million when compared to
adjusted net interest income of $125.2 million, excluding fair value
adjustments on derivative instruments of $5 thousand, for the fourth
quarter of 2015. The decrease in adjusted net interest income was mainly
due to:

A $1.0 million decrease in interest income on consumer loans directly
attributable to the $34.8 million reduction in the average balance,
primarily auto loans.

A $0.3 million decrease in interest income on residential mortgage
loans primarily attributable to the increase in non-accrual loans.

Partially offset by:

A $0.4 million increase in interest income on commercial loans
primarily reflecting an increase of approximately $0.7 million related
to the benefit of higher short-term interest rates on loan repricings
and an increase of $0.7 million related to higher fees on certain
large loans paid off during the current quarter. These variances were
partially offset by a $0.4 million decrease in interest income related
to the $35.6 million decrease in the average balance of commercial
loans and a $0.5 million adverse variance related to the impact of one
less day in the current quarter compared to the prior quarter.

A $0.3 million increase in interest income on cash balances deposited
with the Federal Reserve Bank due to the increase in the fed funds
rate in December 2015.

The net interest margin increased by 11 basis points to 4.18% in the
first quarter of 2016 compared to 4.07% in the fourth quarter. The
margin expansion reflects, among other things, the aforementioned
benefit of higher short-term interest rates on commercial loans and cash
balances deposited with the Federal Reserve Bank that more than offset
the borrowing repricings, particularly repurchase agreements and
subordinated debentures associated with trust preferred securities. In
addition, the net interest margin benefited from the reduction in the
average cash balances deposited with the Federal Reserve in light of the
expected, and previously reported withdrawal of temporary government
deposits from a municipal agency in the latter part of the fourth
quarter of 2015.

PROVISION FOR LOAN AND LEASE LOSSES

The provision for loan and lease losses for the first quarter of 2016
was $21.1 million compared to $33.6 million for the fourth quarter of
2015, a decrease of $12.6 million driven by the following variances:

An $8.2 million decrease in the provision for commercial and
construction loans, reflecting the net impact in the prior quarter of
$11.1 million associated with two items: (i) a $19.2 million charge
related to qualitative factor adjustments that stressed the historical
loss rates applied to the Corporation’s exposure to loans extended to
or guaranteed by the Puerto Rico Government (excluding municipalities)
and (ii) an $8.1 million reserve release for construction loans
primarily due to adjustments to the general reserve given the
stabilization in the asset quality of land loans. The aforementioned
net decrease in the provision was partially offset, among other
things, by a higher migration of loans to adverse classification
categories.

A $2.6 million decrease in the provision for residential mortgage
loans driven by a lower underlying loss severity experience on these
loans.

A $1.7 million decrease in the provision for consumer loans. The
decrease in the provision, which was primarily reflected in the
personal loans category, was driven by lower historical loss rates.

See Credit Quality below for additional information regarding the
allowance for loan and lease losses, including variances in net
charge-offs.

NON-INTEREST INCOME

Quarter Ended

March 31,

December 31,

September 30,

June 30,

March 31,

(in thousands)

2016

2015

2015

2015

2015

Service charges on deposit accounts

$

5,800

$

5,474

$

5,082

$

5,219

$

4,555

Mortgage banking activities

4,753

4,566

4,270

4,763

3,618

Net loss on investments and impairments

(6,679

)

(3,033

)

(231

)

(13,097

)

(156

)

Gain on early extinguishment of debt

4,217

-

-

-

-

Gain on sale of merchant contracts

-

7,000

-

-

-

Bargain purchase gain

-

-

-

-

13,443

Other operating income

10,378

9,161

9,637

9,785

11,269

Non-interest income

$

18,469

$

23,168

$

18,758

$

6,670

$

32,729

Non-interest income for the first quarter of 2016 amounted to $18.5
million, compared to $23.2 million for the fourth quarter of 2015.
Adjusted non-interest income for the first quarter of 2016 was $20.9
million (excluding OTTI charges on debt securities of $6.7 million and
the $4.2 million gain on the repurchase and cancellation of trust
preferred securities) compared to adjusted non-interest income of $19.2
million for the fourth quarter of 2015 (excluding OTTI charges on debt
securities of $3.0 million and the $7.0 million gain on the sale of
merchant contracts). The $1.7 million increase in adjusted non-interest
income was primarily due to:

A $2.0 million increase in insurance commissions’ income, included as
part of “Other operating income” in the table above, reflecting
seasonal contingent commissions received by the insurance agency based
on the prior year’s production of insurance policies.

A $0.3 million increase in income from service charges on deposits,
primarily reflecting the full quarter impact of new service and
transactional fees on certain products implemented in November 2015.

A $0.2 million increase in revenues from the mortgage banking business
driven by a $0.9 million increase in gains on sale of residential
mortgage loans in the secondary market associated with market
expectations of lower long-term interest rates that resulted in higher
gain margins, partially offset by a $0.7 million increase in losses on
TBAs MBS forward contracts. Loans sold in the secondary market to U.S.
government-sponsored entities amounted to $106.0 million with a
related gain of $4.3 million in the first quarter of 2016, compared to
$104.4 million with a related gain of $3.4 million in the fourth
quarter of 2015.

Partially offset by:

A $0.6 million decrease in fees from merchant transactions, included
as part of “Other operating income” in the table above, reflecting the
full quarter impact of the sale of merchant contracts completed in
late October 2015 and normal seasonal decline (a reduction of
approximately $0.4 million in processing costs, depreciation and other
expenses related to the sale of merchant contracts was reflected in
non-interest expenses).

A $0.5 million decrease in credit cards fees, included as part of
“Other operating income” in the table above.

NON-INTEREST EXPENSES

Quarter Ended

March 31,

December 31,

September 30,

June 30,

March 31,

(In thousands)

2016

2015

2015

2015

2015

Employees' compensation and benefits

$

38,435

$

39,176

$

37,284

$

37,841

$

35,654

Occupancy and equipment

14,183

14,639

15,248

15,059

14,231

Deposit insurance premium

6,060

7,484

5,300

5,405

5,770

Other insurance and supervisory fees

1,283

1,291

1,290

1,391

1,090

Taxes, other than income taxes

3,792

3,472

3,065

3,131

3,001

Professional fees:

Collections, appraisals and other credit related fees

2,381

3,340

2,269

3,777

3,432

Outsourcing technology services

4,768

4,505

4,549

4,789

4,704

Other professional fees

3,627

2,855

3,891

7,539

5,356

Credit and debit card processing expenses

3,282

3,992

4,283

3,945

3,957

Business promotion

4,003

4,335

4,097

3,660

2,705

Communications

1,808

1,884

2,189

2,045

1,608

Net loss on OREO operations

3,206

3,941

4,345

4,624

2,628

Loss on sale of certain OREOs included in the bulk sale

-

-

-

250

-

Bulk sale of assets related expenses

-

-

-

918

-

Acquisitions of loans/assumption of deposits from Doral Bank
non-recurring expenses

-

-

-

2,562

2,084

Other

6,169

5,112

5,467

5,863

5,508

Total

$

92,997

$

96,026

$

93,277

$

102,799

$

91,728

Non-interest expenses in the first quarter of 2016 amounted to $93.0
million, a decrease of $3.0 million from $96.0 million for the fourth
quarter of 2015. The results for the prior quarter included costs of
$2.2 million related to the voluntary early retirement program reflected
in “Employees’ compensation and benefits” in the table above. Excluding
the voluntary early retirement program costs, non-interest expenses
decreased by $0.8 million compared to the prior quarter. The main
drivers of the $0.8 million decrease were:

A $1.4 million decrease in the FDIC insurance premium expense
reflecting, among other things, higher liquidity levels at end of
period, and a decrease in average assets and brokered deposit balances.

A $0.7 million increase in rental income on OREO properties, which is
recorded as a reduction to “Net loss on OREO operations” in the table
above, primarily due to both rental income from an income-producing
property repossessed in the latter part of the fourth quarter of 2015
and higher income earned on the existing inventory.

A $0.4 million decrease in depreciation, processing costs and other
expenses related to the sale of merchant contracts completed in the
prior quarter.

A $0.3 million decrease in business promotion expenses, primarily due
to the timing of advertising campaigns.

Partially offset by:

A $1.5 million increase in employees’ compensation and benefits
expense, excluding the impact in the prior quarter of the voluntary
early retirement program costs, primarily reflecting higher seasonal
payroll taxes and bonus accruals.

A $0.9 million increase in the provision for unfunded loan
commitments, included as part of “Other” in the table above, primarily
related to a floor plan revolving line of credit.

Total professional service fees of $10.8 million remained relatively
flat compared to the fourth quarter of 2015 as the decrease of $1.0
million in troubled loans resolution and collection efforts was offset
by increases in consulting and other professional services fees.

INCOME TAXES

The Corporation recorded an income tax expense for the first quarter of
2016 of $5.7 million compared to $3.8 million for the fourth quarter of
2015. As of March 31, 2016, the Corporation had a net deferred tax asset
of $307.6 million (net of a valuation allowance of $197.0 million,
including a valuation allowance of $170.7 million against the deferred
tax assets of the Corporation’s banking subsidiary, FirstBank).

CREDIT QUALITY

Non-Performing Assets

(Dollars in thousands)

March 31,

December 31,

September 30,

June 30,

March 31,

2016

2015

2015

2015

2015

Non-performing loans held for investment:

Residential mortgage

$

172,890

$

169,001

$

174,555

$

175,035

$

172,583

Commercial mortgage

182,763

51,333

68,979

95,088

142,385

Commercial and Industrial

137,896

137,051

141,855

143,935

186,500

Construction (1)

54,036

54,636

55,971

16,118

27,163

Consumer and Finance leases

27,351

30,752

31,275

33,397

34,913

Total non-performing loans held for investment

574,936

442,773

472,635

463,573

563,544

OREO

142,888

146,801

124,442

122,129

122,628

Other repossessed property

11,339

12,223

12,083

10,706

13,585

Total non-performing assets, excluding loans held for sale

$

729,163

$

601,797

$

609,160

$

596,408

$

699,757

Non-performing loans held for sale (1)

8,079

8,135

8,027

48,032

54,588

Total non-performing assets, including loans held for sale (2)

$

737,242

$

609,932

$

617,187

$

644,440

$

754,345

Past-due loans 90 days and still accruing (3)

$

184,890

$

163,197

$

188,348

$

196,547

$

178,572

Non-performing loans held for investment to total loans held for
investment

6.30

%

4.77

%

5.08

%

5.03

%

5.94

%

Non-performing loans to total loans

6.36

%

4.84

%

5.15

%

5.50

%

6.46

%

Non-performing assets, excluding non-performing loans held for
sale, to total assets, excluding non-performing loans held for sale

5.74

%

4.79

%

4.75

%

4.76

%

5.34

%

Non-performing assets to total assets

5.80

%

4.85

%

4.81

%

5.12

%

5.74

%

(1)

During the third quarter of 2015, upon the signing of a new
agreement with a borrower, the Corporation changed its intent to
sell a $40.0 million construction loan in the Virgin Islands.
Accordingly, the loan was transferred back from held for sale to
held for investment and continues to be classified as a Troubled
Debt Restructuring ("TDR") and a non-performing loan.

(2)

Purchased credit impaired ("PCI") loans of $172.3 million accounted
for under ASC 310-30 as of March 31, 2016, primarily mortgage loans
acquired from Doral Bank in the first quarter of 2015 and from Doral
Financial in the second quarter of 2014, are excluded and not
considered non-performing due to the application of the accretion
method, under which these loans will accrete interest income over
the remaining life of the loans using estimated cash flow analysis.

(3)

Amount includes PCI loans with individual delinquencies over 90 days
and still accruing with a carrying value as of March 31, 2016 of
approximately $25.9 million, primarily related to the loans acquired
from Doral Bank in the first quarter of 2015 and from Doral
Financial in the second quarter of 2014.

Variances in credit quality metrics:

Total non-performing assets increased by $127.3 million to $737.2
million as of March 31, 2016, compared to $609.9 million as of
December 31, 2015. Total non-performing loans, including
non-performing loans held for sale, increased by $132.1 million from
$450.9 million as of the end of the fourth quarter of 2015 to $583.0
million as of March 31, 2016. The increase in non-performing assets
was primarily attributable to the inflow of the $128.6 million
exposure to commercial loans guaranteed by the TDF. The TDF is a
subsidiary of the GDB that facilitates private sector financings to
the Puerto Rico’s hotel industry. On April 6, 2016, the Puerto Rico
Government enacted the Puerto Rico Emergency Moratorium and Financial
Rehabilitation Act, which gives Puerto Rico’s governor emergency
powers to deal with the challenging fiscal situation, including the
ability to declare a moratorium on all bonds and other payments.
Puerto Rico’s governor also issued an executive order intended to
protect the GDB’s liquidity by allowing withdrawals only to fund
necessary costs for essential services such as health, public safety
and education services. Excluding the $128.6 million exposure to loans
guaranteed by the TDF, non-performing assets decreased by $1.2 million
compared to the prior quarter.

These loans were current in contractual payments as of March 31, 2016.
Prospectively, principal and interest payments will be applied against
the outstanding balance of the loans. The Corporation has been receiving
combined payments from the borrowers and TDF as guarantor sufficient to
cover contractual payments on these loans, including collections of
principal and interest from TDF of $0.6 million in the first quarter of
2016 and $5.3 million in year 2015.

Inflows to non-performing loans held for investment were $177.3
million. Excluding the aforementioned $128.6 million exposure to
commercial loans guaranteed by the TDF, total inflows were $48.8
million, an increase of $6.8 million compared to inflows of $42.0
million in the fourth quarter of 2015. The increase was primarily
reflected in the residential mortgage loans portfolio, which showed
inflows of $24.9 million in the first quarter of 2016, a $4.8 million
increase compared to inflows of $20.2 million in the fourth quarter of
2015, and inflows of non-performing commercial and industrial loans of
$8.6 million in the first quarter of 2016, a $5.2 million increase
compared to inflows of $3.4 million in the fourth quarter of 2015.

Adversely classified commercial and construction loans held for
investment increased by $47.0 million to $569.1 million as of March
31, 2016, driven by the inflow to adverse classification categories of
three commercial loans totaling $48.3 million.

The OREO balance decreased by $3.9 million, driven by adjustments to
value of $4.7 million and sales of $8.3 million, partially offset by
additions of $9.1 million in the first quarter of 2016.

Total troubled debt restructuring (“TDR”) loans held for investment
were $659.1 million as of March 31, 2016, down $2.5 million from
December 31, 2015. Approximately $410.0 million of total TDR loans
held for investment were in accrual status as of March 31, 2016.

Allowance for Loan and Lease Losses

The following table sets forth information concerning the allowance for
loan and lease losses during the periods indicated:

Quarter Ended

(Dollars in thousands)

March 31,

December 31,

September 30,

June 30,

March 31,

2016

2015

2015

2015

2015

Allowance for loan and lease losses, beginning of period

$

240,710

$

228,966

$

221,518

$

226,064

$

222,395

Provision for loan and lease losses

21,053

33,633

31,176

74,266

(1)

32,970

Net (charge-offs) recoveries of loans:

Residential mortgage

(6,960

)

(4,877

)

(4,880

)

(3,257

)

(5,094

)

Commercial mortgage

(529

)

(1,967

)

(3,657

)

(40,213

)

(2)

(3,730

)

Commercial and Industrial

(3,479

)

(2,824

)

(940

)

(21,869

)

(3)

(3,895

)

Construction

(74

)

(4

)

73

(2,083

)

(4)

(398

)

Consumer and finance leases

(12,596

)

(12,217

)

(14,324

)

(11,390

)

(16,184

)

Net charge-offs

(23,638

)

(21,889

)

(23,728

)

(78,812

)

(5)

(29,301

)

Allowance for loan and lease losses, end of period

$

238,125

$

240,710

$

228,966

$

221,518

$

226,064

Allowance for loan and lease losses to period end total loans held
for investment

2.61

%

2.60

%

2.46

%

2.40

%

2.38

%

Net charge-offs (annualized) to average loans outstanding during the
period

1.03

%

0.95

%

1.02

%

3.35

%

1.25

%

Net charge-offs (annualized), excluding charge-offs of $61.4
million related to a bulk sale of assets in the second quarter of
2015, to average loans outstanding during the period

1.03

%

0.95

%

1.02

%

0.75

%

1.25

%

Provision for loan and lease losses to net charge-offs during the
period

0.89x

1.54x

1.31x

0.94x

1.13x

Provision for loan and lease losses to net charge-offs during the
period, excluding impact of a bulk sale of assets in the second
quarter of 2015

0.89x

1.54x

1.31x

1.57x

1.13x

(1) Includes provision of $46.9 million associated with a bulk sale
of assets.

(2) Includes net charge-offs totaling $37.6 million associated with
a bulk sale of assets.

(3) Includes net charge-offs totaling $20.6 million associated with
a bulk sale of assets.

(4) Includes net charge-offs totaling $3.3 million associated with a
bulk sale of assets.

(5) Includes net charge-offs totaling $61.4 million associated with
a bulk sale of assets.

The ratio of the allowance for loan and lease losses to total loans
held for investment remained relatively flat at 2.61% as of March 31,
2016 compared to 2.60% as of December 31, 2015. The ratio of the total
allowance to non-performing loans held for investment was 41.42% as of
March 31, 2016 compared to 54.36% as of December 31, 2015 reflecting
the migration to non-performing status of the $128.6 million exposure
to commercial loans guaranteed by the TDF. These loans have been
adversely classified since the third quarter of 2015 and the general
reserve for commercial loans was increased in the fourth quarter of
2015 due to qualitative factor adjustments applied to the Puerto Rico
Government-related exposure, including this particular portfolio. The
migration of the loans guaranteed by TDF to non-performing status in
the first quarter of 2016 did not result in significant increases to
the allowance for loan losses. As of March 31, 2016, the total reserve
coverage ratio related to commercial loans extended to or guaranteed
by the Puerto Rico Government (excluding municipalities) was 20%.

The following table sets forth information concerning the composition of
the Corporation’s allowance for loan and lease losses as of March 31,
2016 and December 31, 2015 by loan category and by whether the allowance
and related provisions were calculated individually for impairment
purposes or through a general valuation allowance:

(Dollars in thousands)

ResidentialMortgage Loans

Commercial Loans(including CommercialMortgage,
C&I, andConstruction)

Consumer andFinance Leases

Total

As of March 31, 2016

Impaired loans:

Principal balance of loans, net of charge-offs

$

461,606

$

412,349

$

44,360

$

918,315

Allowance for loan and lease losses

16,150

38,736

9,387

64,273

Allowance for loan and lease losses to principal balance

3.50

%

9.39

%

21.16

%

7.00

%

PCI loans:

Carrying value of PCI loans

169,190

3,142

-

172,332

Allowance for PCI loans

4,423

145

-

4,568

Allowance for PCI loans to carrying value

2.61

%

4.61

%

-

2.65

%

Loans with general allowance:

Principal balance of loans

2,700,149

3,598,545

1,742,001

8,040,695

Allowance for loan and lease losses

17,975

103,974

47,335

169,284

Allowance for loan and lease losses to principal balance

0.67

%

2.89

%

2.72

%

2.11

%

Total loans held for investment:

Principal balance of loans

$

3,330,945

$

4,014,036

$

1,786,361

$

9,131,342

Allowance for loan and lease losses

38,548

142,855

56,722

238,125

Allowance for loan and lease losses to principal balance

1.16

%

3.56

%

3.18

%

2.61

%

As of December 31, 2015

Impaired loans:

Principal balance of loans, net of charge-offs

$

460,668

$

305,749

$

40,092

$

806,509

Allowance for loan and lease losses

21,787

22,371

8,423

52,581

Allowance for loan and lease losses to principal balance

4.73

%

7.32

%

21.01

%

6.52

%

PCI loans:

Carrying value of PCI loans

170,766

3,147

-

173,913

Allowance for PCI loans

3,837

125

-

3,962

Allowance for PCI loans to carrying value

2.25

%

3.97

%

-

2.28

%

Loans with general allowance:

Principal balance of loans

2,713,285

3,793,101

1,787,057

8,293,443

Allowance for loan and lease losses

13,946

118,002

52,219

184,167

Allowance for loan and lease losses to principal balance

0.51

%

3.11

%

2.92

%

2.22

%

Total loans held for investment:

Principal balance of loans

$

3,344,719

$

4,101,997

$

1,827,149

$

9,273,865

Allowance for loan and lease losses

39,570

140,498

60,642

240,710

Allowance for loan and lease losses to principal balance

1.18

%

3.43

%

3.32

%

2.60

%

Net Charge-Offs

The following table presents annualized net charge-offs to average loans
held-in-portfolio:

Quarter Ended

March 31,

December 31,

September 30,

June 30,

March 31,

2016

2015

2015

2015

2015

Residential mortgage

0.84

%

0.59

%

0.59

%

0.39

%

0.65

%

Commercial mortgage

0.14

%

0.51

%

0.95

%

10.01

%

(1)

0.90

%

Commercial and Industrial

0.59

%

0.48

%

0.16

%

3.65

%

(2)

0.63

%

Construction

0.18

%

0.01

%

-0.17

%

4.90

%

(3)

0.93

%

Consumer and finance leases

2.79

%

2.65

%

3.05

%

2.38

%

3.30

%

Total loans

1.03

%

0.95

%

1.02

%

3.35

%

(4)

1.25

%

(1) Includes net charge-offs totaling $37.6 million associated
with the bulk sale of assets. The ratio of commercial mortgage net
charge-offs to average loans, excluding charge-offs associated
with the bulk sale of assets, was 0.68%.

(2) Includes net charge-offs totaling $20.6 million associated
with the bulk sale of assets. The ratio of commercial and
industrial net charge-offs to average loans, excluding charge-offs
associated with the bulk sale of assets, was 0.22%.

(3) Includes net charge-offs totaling $3.3 million associated with
the bulk sale of assets. The ratio of construction net charge-offs
to average loans, excluding charge-offs associated with the bulk
sale of assets, was (2.94)%.

(4) Includes net charge-offs totaling $61.4 million associated
with the bulk sale of assets. The ratio of total charge-offs to
average loans, excluding charge-offs associated with the bulk sale
of assets, was 0.75%.

The ratios above are based on annualized net charge-offs and are not
necessarily indicative of the results expected in subsequent periods.

Net charge-offs for the first quarter of 2016 were $23.6 million, or an
annualized 1.03% of average loans, compared to $21.9 million, or an
annualized 0.95% of average loans, in the fourth quarter of 2015. The
increase of $1.7 million was mainly related to:

A $2.1 million increase in residential mortgage loan net charge-offs,
primarily resulting from valuations for impairment purposes of loans
considered homogeneous given high delinquency and loan-to-value levels.

A $0.7 million decrease in commercial and construction loan net
charge-offs, reflecting a decrease of $1.4 million in the commercial
mortgage loan portfolio, partially offset by a $0.7 million increase
in commercial and industrial net charge-offs.

STATEMENT OF FINANCIAL CONDITION

Total assets were approximately $12.7 billion as of March 31, 2016, up
$141.4 million from December 31, 2015.

The increase was mainly due to:

A $274.4 million increase in cash and cash equivalents primarily tied
to the increase in demand deposits and proceeds from certain large
commercial loans paid off during the quarter.

Partially offset by:

A $140.5 million decrease in total loans primarily reflecting an $88.0
million decrease in commercial and construction loans and a $40.8
million decrease in consumer loans. The decrease in commercial loans
was driven by two large commercial loans totaling approximately $94.3
million paid off during the first quarter, and a $17 million decrease
in the floor plan lending portfolio, partially offset by a $49.6
million increase in the commercial and construction loan portfolio in
the Florida region.

Total loan originations, including refinancings, renewals, and draws
from existing revolving and non-revolving commitments, amounted to
approximately $645.4 million, compared to $786.3 million in the fourth
quarter of 2015. These figures exclude the credit card utilization
activity. All the principal loan categories showed a decline in
activity, including a $126.3 million decrease in commercial and
construction loan originations, a $10.2 million decrease in residential
mortgage loan originations and a $4.3 million decrease in consumer loan
originations.

Total liabilities were approximately $11.0 billion as of March 31, 2016,
up $86.3 million from December 31, 2015.

The increase was mainly due to:

A $137.1 million increase in deposits, excluding government deposits
and brokered CDs, primarily demand deposits and savings in both Puerto
Rico and the Virgin Islands regions.

A $50.7 million increase in government deposits, including increases
of $26.1 million in Puerto Rico and $24.6 million in the Virgin
Islands.

Partially offset by:

A $91.2 million decrease in brokered CDs.

A $10.0 million decrease in junior subordinated debentures associated
with the repurchase and cancellation of trust preferred securities.

Total stockholders’ equity amounted to $1.7 billion as of March 31,
2016, an increase of $55.0 million from December 31, 2015, mainly driven
by:

An increase of $24.6 million in the fair value of U.S. agency MBS and
debt securities recorded as part of other comprehensive income.

The net income of $23.3 million reported in the first quarter.

The Corporation’s common equity tier 1 capital, tier 1 capital, total
capital and leverage ratios under the Basel III rules as of March 31,
2016 were 16.60%, 16.60%, 20.17% and 12.20%, respectively, compared to
common equity tier 1 capital, tier 1 capital, total capital and leverage
ratios of 16.92%, 16.92%, 20.01%, and 12.22%, respectively, as of the
end of the fourth quarter of 2015. The decrease in common equity tier 1
capital, tier 1 capital and leverage ratios primarily reflects the
effect of the Basel III transition provisions related to the phase out
of trust preferred securities from Tier 1 capital.

Meanwhile, the common equity tier 1 capital, tier 1 capital, total
capital and leverage ratios as of March 31, 2016 of our banking
subsidiary, FirstBank Puerto Rico, were 16.15%, 18.70%, 19.97%, and
13.75%, respectively, compared to common equity tier 1 capital, tier 1
capital, total capital and leverage ratios of 16.35%, 18.45%, 19.73% and
13.33%, respectively, as of the end of the fourth quarter of 2015.

Tangible Common Equity

The Corporation’s tangible common equity ratio increased to 13.13% as of
March 31, 2016 from 12.84% as of December 31, 2015.

The following table is a reconciliation of the Corporation’s tangible
common equity and tangible assets over the last five quarters to the
comparable GAAP items:

(In thousands, except ratios and per share information)

March 31,

December 31,

September 30,

June 30,

March 31,

2016

2015

2015

2015

2015

Tangible Equity:

Total equity - GAAP

$

1,749,167

$

1,694,134

$

1,700,950

$

1,668,220

$

1,705,750

Preferred equity

(36,104

)

(36,104

)

(36,104

)

(36,104

)

(36,104

)

Goodwill

(28,098

)

(28,098

)

(28,098

)

(28,098

)

(28,098

)

Purchased credit card relationship intangible

(12,622

)

(13,319

)

(14,087

)

(14,854

)

(15,622

)

Core deposit intangible

(8,674

)

(9,166

)

(9,725

)

(10,283

)

(10,914

)

Insurance customer relationship intangible

(1,042

)

-

-

-

-

Tangible common equity

$

1,662,627

$

1,607,447

$

1,612,936

$

1,578,881

$

1,615,012

Tangible Assets:

Total assets - GAAP

$

12,714,370

$

12,573,019

$

12,820,989

$

12,578,813

$

13,147,919

Goodwill

(28,098

)

(28,098

)

(28,098

)

(28,098

)

(28,098

)

Purchased credit card relationship intangible

(12,622

)

(13,319

)

(14,087

)

(14,854

)

(15,622

)

Core deposit intangible

(8,674

)

(9,166

)

(9,725

)

(10,283

)

(10,914

)

Insurance customer relationship intangible

(1,042

)

-

-

-

-

Tangible assets

$

12,663,934

$

12,522,436

$

12,769,079

$

12,525,578

$

13,093,285

Common shares outstanding

217,012

215,089

214,982

214,694

213,827

Tangible common equity ratio

13.13

%

12.84

%

12.63

%

12.61

%

12.33

%

Tangible book value per common share

$

7.66

$

7.47

$

7.50

$

7.35

$

7.55

Exposure to Puerto Rico Government

As of March 31, 2016, the Corporation had $315.6 million of credit
facilities, excluding investment securities, extended to the Puerto Rico
Government, its municipalities and public corporations, of which $302.2
million was outstanding (book value of $297.2 million), compared to
$314.6 million outstanding as of December 31, 2015. Approximately $199.3
million of the granted credit facilities outstanding consisted of loans
to municipalities in Puerto Rico for which, in most cases, the good
faith, credit and unlimited taxing power of the applicable municipality
have been pledged to their repayment. Approximately $6.9 million
consisted of loans to units of the central government, and approximately
$96.0 million ($91.0 million book value) consisted of loans to public
corporations, including the direct exposure to the Puerto Rico Electric
Power Authority (“PREPA”) with a book value of $69.7 million as of March
31, 2016. In addition, the Corporation had outstanding the
aforementioned $128.6 million exposure in financings to the hotel
industry in Puerto Rico guaranteed by the TDF as of March 31, 2016, down
$0.8 million, compared to $129.4 million outstanding as of December 31,
2015.

The Corporation held $43.4 million of obligations of the Puerto Rico
Government as part of its available-for-sale investment securities
portfolio, net of the $22.2 million other-than-temporary credit
impairment charges recorded in 2016 and 2015, recorded on its books at a
fair value of $26.4 million as of March 31, 2016.

As of March 31, 2016, the Corporation had $416.5 million of public
sector deposits in Puerto Rico, compared to $386.3 million as of
December 31, 2015. Approximately 33% is from municipalities and
municipal agencies in Puerto Rico and 67% is from public corporations
and the central government and agencies in Puerto Rico.

Conference Call / Webcast Information

First BanCorp’s senior management will host an earnings conference call
and live webcast on Tuesday, April 26, 2016, at 10:00 a.m. (Eastern
Time). The call may be accessed via a live Internet webcast through the
investor relations section of the Corporation’s web site: www.1firstbank.com
or through a dial-in telephone number at (877) 506-6537 or (412)
380–2001 for international callers. The Corporation recommends that
listeners go to the web site at least 15 minutes prior to the call to
download and install any necessary software. Following the webcast
presentation, a question and answer session will be made available to
research analysts and institutional investors. A replay of the webcast
will be archived in the investor relations section of First BanCorp’s
web site, www.1firstbank.com,
until April 26, 2017. A telephone replay will be available one hour
after the end of the conference call through May 26, 2016 at (877)
344-7529 or (412) 317-0088 for international callers. The replay access
code is 10083978.

Safe Harbor

This press release may contain “forward-looking statements” concerning
the Corporation’s future economic and financial performance. The words
or phrases “expect,” “anticipate,” “intend,” “look forward,” “should,”
“would,” “believes” and similar expressions are meant to identify
“forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and are subject to the safe harbor
created by such sections. The Corporation cautions readers not to place
undue reliance on any such “forward-looking statements,” which speak
only as of the date made, and advises readers that various factors,
including, but not limited to, the following could cause actual results
to differ materially from those expressed in, or implied by such
forward-looking statements: uncertainty about whether the Corporation
will be able to continue to fully comply with the written agreement
dated June 3, 2010 that the Corporation entered into with the Federal
Reserve Bank of New York (the “New York Fed”) that, among other things,
requires the Corporation to serve as a source of strength to FirstBank
and that, except with the consent generally of the New York Fed and the
Board of Governors of the Federal Reserve System (the “Federal Reserve
Board”), prohibits the Corporation from paying dividends to stockholders
or receiving dividends from FirstBank, making payments on trust
preferred securities or subordinated debt and incurring, increasing or
guaranteeing debt or repurchasing any capital securities; the ability of
the Puerto Rico government or any of its public corporations or other
instrumentalities to repay its respective debt obligations, including
the effect of the recent payment defaults on certain bonds of government
public corporations, recent and any future downgrades of the long-term
and short-term debt ratings of the Puerto Rico government, and
uncertainties as to how the U.S. government will address Puerto Rico’s
financial problems, which could exacerbate Puerto Rico’s adverse
economic conditions and, in turn, further adversely impact the
Corporation; a decrease in demand for the Corporation’s products and
services and lower revenues and earnings because of the continued
recession in Puerto Rico; uncertainty as to the availability of certain
funding sources, such as brokered CDs; the Corporation’s reliance on
brokered CDs to fund operations and provide liquidity; the risk of not
being able to fulfill the Corporation’s cash obligations or resume
paying dividends to the Corporation’s stockholders in the future due to
the Corporation’s need to receive approval from the New York Fed and the
Federal Reserve Board to declare or pay any dividends and to take
dividends or any other form of payment representing a reduction in
capital from FirstBank or FirstBank’s failure to generate sufficient
cash flow to make a dividend payment to the Corporation; the weakness of
the real estate markets and of the consumer and commercial sectors and
their impact on the credit quality of the Corporation’s loans and other
assets, which has contributed and may continue to contribute to, among
other things, high levels of non-performing assets, charge-offs and
provisions for loan and lease losses and may subject the Corporation to
further risk from loan defaults and foreclosures; the ability of
FirstBank to realize the benefits of its deferred tax assets subject to
the remaining valuation allowance; adverse changes in general economic
conditions in Puerto Rico, the U.S., and the U.S. and British Virgin
Islands, including the interest rate environment, market liquidity,
housing absorption rates, real estate prices, and disruptions in the
U.S. capital markets, which reduced interest margins and affected
funding sources, and has affected demand for all of the Corporation’s
products and services and reduced the Corporation’s revenues and
earnings, and the value of the Corporation’s assets, and may continue to
have these effects; an adverse change in the Corporation’s ability to
attract new clients and retain existing ones; the risk that additional
portions of the unrealized losses in the Corporation’s investment
portfolio are determined to be other-than-temporary, including
additional impairments on the Puerto Rico government’s obligations;
uncertainty about regulatory and legislative changes for financial
services companies in Puerto Rico, the U.S., and the U.S. and British
Virgin Islands, which could affect the Corporation’s financial condition
or performance and could cause the Corporation’s actual results for
future periods to differ materially from prior results and anticipated
or projected results; changes in the fiscal and monetary policies and
regulations of the U.S. federal government and the Puerto Rico and other
governments, including those determined by the Federal Reserve Board,
the New York Fed, the FDIC, government-sponsored housing agencies, and
regulators in Puerto Rico and the U.S. and British Virgin Islands; the
risk of possible failure or circumvention of controls and procedures and
the risk that the Corporation’s risk management policies may not be
adequate; the risk that the FDIC may increase the deposit insurance
premium and/or require special assessments to replenish its insurance
fund, causing an additional increase in the Corporation’s non-interest
expenses; the impact on the Corporation’s results of operations and
financial condition of acquisitions and dispositions; a need to
recognize impairments on the Corporation’s financial instruments,
goodwill, or other intangible assets relating to acquisitions; the risk
that downgrades in the credit ratings of the Corporation’s long-term
senior debt will adversely affect the Corporation’s ability to access
necessary external funds; the impact on the Corporation’s business,
business practices and results of operations of a potential higher
interest rate environment; and general competitive factors and industry
consolidation. The Corporation does not undertake, and specifically
disclaims any obligation, to update any “forward-looking statements” to
reflect occurrences or unanticipated events or circumstances after the
date of such statements, except as required by the federal securities
laws.

Basis of Presentation

Use of Non-GAAP Financial Measures

This press release contains non-GAAP financial measures. Non-GAAP
financial measures are used when management believes they will be
helpful to an understanding of the Corporation’s results of operations
or financial position. Where non-GAAP financial measures are used, the
comparable GAAP financial measure, as well as the reconciliation of the
non-GAAP financial measure to the comparable GAAP financial measure, can
be found in the text or in the attached tables to this earnings release.
Any analysis of these non-GAAP financial measures should be used only in
conjunction with results presented in accordance with GAAP.

Tangible Common Equity Ratio and Tangible Book Value per Common Share

The tangible common equity ratio and tangible book value per common
share are non-GAAP financial measures generally used by the financial
community to evaluate capital adequacy. Tangible common equity is total
equity less preferred equity, goodwill, core deposit intangibles, and
other intangibles, such as the purchased credit card relationship
intangible and the insurance customer relationship intangible. Tangible
assets are total assets less goodwill, core deposit intangibles, and
other intangibles, such as the purchased credit card relationship
intangible and the insurance customer relationship intangible.
Management and many stock analysts use the tangible common equity ratio
and tangible book value per common share in conjunction with more
traditional bank capital ratios to compare the capital adequacy of
banking organizations with significant amounts of goodwill or other
intangible assets, typically stemming from the use of the purchase
method of accounting for mergers and acquisitions. Accordingly, the
Corporation believes that disclosures of these financial measures may be
useful also to investors. Neither tangible common equity nor tangible
assets, or the related measures should be considered in isolation or as
a substitute for stockholders’ equity, total assets, or any other
measure calculated in accordance with GAAP. Moreover, the manner in
which the Corporation calculates its tangible common equity, tangible
assets, and any other related measures may differ from that of other
companies reporting measures with similar names.

Adjusted Pre-Tax, Pre-Provision Income

Adjusted pre-tax, pre-provision income is a non-GAAP performance metric
that management uses and believes that investors may find useful in
analyzing underlying performance trends, particularly in times of
economic stress. Adjusted pre-tax, pre-provision income, as defined by
management, represents net income (loss) excluding income tax expense
(benefit), the provision for loan and lease losses, gains and losses on
the sale of investment securities and OTTI charges on investment
securities, fair value adjustments on derivatives as well as certain
items identified as unusual, non-recurring or non-operating.

In addition, from time to time, adjusted pre-tax, pre-provision income
will reflect the omission of revenue or expense items that management
judges to be outside of ordinary banking activities or of items that,
while they may be associated with ordinary banking activities, are so
unusually large that management believes that a complete analysis of the
Corporation’s performance requires consideration also of adjusted
pre-tax, pre-provision income that excludes such amounts.

Net Interest Income, Excluding Valuations, and on a Tax-Equivalent
Basis

Net interest income, interest rate spread, and net interest margin are
reported excluding the changes in the fair value of derivative
instruments and on a tax-equivalent basis, in order to provide to
investors additional information about the Corporation’s net interest
income that management uses and believes should facilitate comparability
and analysis. The changes in the fair value of derivative instruments
have no effect on interest due or interest earned on interest-bearing
liabilities or interest-earning assets, respectively. The tax-equivalent
adjustment to net interest income recognizes the income tax savings when
comparing taxable and tax-exempt assets and assumes a marginal income
tax rate. Income from tax-exempt earning assets is increased by an
amount equivalent to the taxes that would have been paid if this income
had been taxable at statutory rates. Management believes that it is a
standard practice in the banking industry to present net interest
income, interest rate spread, and net interest margin on a fully
tax-equivalent basis. This adjustment puts all earning assets, most
notably tax-exempt securities and certain loans, on a common basis that
facilitates comparison of results to the results of peers.

Financial measures adjusted to exclude the effect of the OTTI charges
on debt securities, the gain on the repurchase and cancellation of trust
preferred securities, the gain on sale of merchant contracts,
non-recurring expenses related to the voluntary early retirement
incentive program, the bargain purchase gain on assets acquired and
deposits assumed from Doral Bank and related acquisition and conversion
costs.

To supplement the Corporation’s financial statements presented in
accordance with GAAP, the Corporation uses, and believes that investors
would benefit from disclosure of the following additional measures of
adjusted non-interest income, adjusted non-interest expenses, and
adjusted net income that exclude gains and losses or expenses that are
either unusual or so unusually large that management believes that a
complete analysis of the Corporation’s performance requires
consideration also of these adjusted financial measures:

Adjusted non-interest income excludes the $6.7 million in OTTI charges
on debt securities recorded in the first quarter of 2016 ($6.3 million
on Puerto Rico Government debt securities and $0.4 million on private
label MBS), the $4.2 million gain on the repurchase and cancellation
of trust preferred securities recorded in the first quarter of 2016,
the $3.0 million OTTI charge on Puerto Rico Government debt securities
recorded in the fourth quarter of 2015 and the $7.0 million gain on
the sale of merchant contracts recorded in the fourth quarter of 2015.

Adjusted non-interest expenses exclude costs of approximately $2.2
million related to the voluntary early retirement incentive program
completed in the fourth quarter of 2015.

Adjusted net income excludes the after-tax effect of all the
aforementioned unusual and/or non-recurring items for the first
quarter of 2016 and fourth quarter of 2015 and also excludes, for the
first quarter of 2015, the $8.2 million after-tax effect of the
bargain purchase gain on assets acquired and deposits assumed from
Doral Bank and $1.3 million after-tax costs of acquisition and
conversion costs associated with the Doral Bank transaction incurred
in the first quarter of 2015.

Management believes that these non-GAAP financial measures enhance the
ability of analysts and investors to analyze trends in the Corporation’s
business and better understand the performance of the Corporation. In
addition, the Corporation may utilize these non-GAAP financial measures
as a guide in its budgeting and long-term planning process.

The following table reconciles these non-GAAP financial measures to the
corresponding measures presented in accordance with GAAP.

First BanCorp. is the parent corporation of FirstBank Puerto Rico, a
state-chartered commercial bank with operations in Puerto Rico, the U.S.
and the British Virgin Islands and Florida, and of FirstBank Insurance
Agency. Among the subsidiaries of FirstBank Puerto Rico are First
Federal Finance Corp. and First Express, both small loan companies, and
FirstBank Puerto Rico Securities, a broker-dealer subsidiary. First
BanCorp’s shares of common stock trade on the New York Stock Exchange
under the symbol FBP. Additional information about First BanCorp. may be
found at www.1firstbank.com.

EXHIBIT A

Table 1 - Selected Financial Data

(In thousands, except per share amounts and financial ratios)

Quarter Ended

March 31,

December 31,

March 31,

2016

2015

2015

Condensed Income Statements:

Total interest income

$

150,831

$

151,640

$

152,485

Total interest expense

26,183

26,427

26,838

Net interest income

124,648

125,213

125,647

Provision for loan and lease losses

21,053

33,633

32,970

Non-interest income

18,469

23,168

32,729

Non-interest expenses

92,997

96,026

91,728

Income before income taxes

29,067

18,722

33,678

Income tax expense

(5,723)

(3,755)

(8,032)

Net income

23,344

14,967

25,646

Net income attributable to common stockholders

23,344

14,967

25,646

Per Common Share Results:

Net earnings per share - basic

$

0.11

$

0.07

$

0.12

Net earnings per share - diluted

$

0.11

$

0.07

$

0.12

Cash dividends declared

$

-

$

-

$

-

Average shares outstanding

212,348

212,058

210,686

Average shares outstanding diluted

213,274

214,092

212,746

Book value per common share

$

7.89

$

7.71

$

7.81

Tangible book value per common share (1)

$

7.66

$

7.47

$

7.55

Selected Financial Ratios (In Percent):

Profitability:

Return on Average Assets

0.74

0.46

0.81

Interest Rate Spread (2)

4.11

4.01

4.13

Net Interest Margin (2)

4.35

4.23

4.31

Return on Average Total Equity

5.46

3.49

6.15

Return on Average Common Equity

5.57

3.57

6.29

Average Total Equity to Average Total Assets

13.60

13.20

13.13

Total capital

20.17

20.01

19.20

Common equity Tier 1 capital

16.60

16.92

16.15

Tier 1 capital

16.60

16.92

16.15

Leverage

12.20

12.22

12.16

Tangible common equity ratio (1)

13.13

12.84

12.33

Dividend payout ratio

-

-

-

Efficiency ratio (3)

64.98

64.72

57.92

Asset Quality:

Allowance for loan and lease losses to loans held for investment

2.61

2.60

2.38

Net charge-offs (annualized) to average loans

1.03

0.95

1.25

Provision for loan and lease losses to net charge-offs

89.06

153.65

112.52

Non-performing assets to total assets

5.80

4.85

5.74

Non-performing loans held for investment to total loans held for
investment

2- On a tax-equivalent basis and excluding changes in the fair
value of derivative instruments (Non-GAAP financial measure). See
page 6 for GAAP to Non-GAAP reconciliations and refer to
discussion in Table 2 below.

3- Non-interest expenses to the sum of net interest income and
non-interest income. The denominator includes non-recurring income
and changes in the fair value of derivative instruments.

1- On a tax-equivalent basis. The tax-equivalent yield was
estimated by dividing the interest rate spread on exempt assets by
1 less the Puerto Rico statutory tax rate of 39% and adding to it
the cost of interest-bearing liabilities. When adjusted to a
tax-equivalent basis, yields on taxable and exempt assets are
comparable. Changes in the fair value of derivative instruments
are excluded from interest income because the changes in valuation
do not affect interest paid or received.

2- Government obligations include debt issued by
government-sponsored agencies.

3- Unrealized gains and losses on available-for-sale securities are
excluded from the average volumes.

4- Average loan balances include the average of non-performing loans.

5- Interest income on loans includes $2.8 million, $2.9 million
and $2.7 million for the quarters ended March 31, 2016, December
31, 2015, and March 31, 2015, respectively, of income from
prepayment penalties and late fees related to the Corporation's
loan portfolio.

Table 3 - Non-Interest Income

Quarter Ended

March 31,

December 31,

March 31,

(In thousands)

2016

2015

2015

Service charges on deposit accounts

$

5,800

$

5,474

$

4,555

Mortgage banking activities

4,753

4,566

3,618

Insurance income

3,269

1,249

3,022

Other operating income

7,109

7,912

8,247

Non-interest income before net gain (loss) on investments, bargain
purchase gain, gain on sale of merchant contracts and gain on
early extinguishment of debt.

20,931

19,201

19,442

Net gain (loss) on sale of investments

8

-

-

OTTI on debt securities

(6,687

)

(3,033

)

(156

)

Net loss on investments

(6,679

)

(3,033

)

(156

)

Bargain purchase gain

-

-

13,443

Gain on sale of merchant contracts

-

7,000

-

Gain on early extinguishment of debt

4,217

-

-

$

18,469

$

23,168

$

32,729

Table 4 - Non-Interest Expenses

Quarter Ended

March 31,

December 31,

March 31,

(In thousands)

2016

2015

2015

Employees' compensation and benefits

$

38,435

$

39,176

$

35,654

Occupancy and equipment

14,183

14,639

14,231

Deposit insurance premium

6,060

7,484

5,770

Other insurance and supervisory fees

1,283

1,291

1,090

Taxes, other than income taxes

3,792

3,472

3,001

Professional fees:

Collections, appraisals and other credit related fees

2,381

3,340

3,432

Outsourcing technology services

4,768

4,505

4,704

Other professional fees

3,627

2,855

5,356

Credit and debit card processing expenses

3,282

3,992

3,957

Business promotion

4,003

4,335

2,705

Communications

1,808

1,884

1,608

Net loss on OREO operations

3,206

3,941

2,628

Non-recurring expenses related to acquisitions of loans/assumption
of deposits from Doral Bank

-

-

2,084

Other

6,169

5,112

5,508

Total

$

92,997

$

96,026

$

91,728

Table 5 - Selected Balance Sheet Data

(In thousands)

As of

March 31,

December 31,

2016

2015

Balance Sheet Data:

Loans, including loans held for sale

$

9,169,210

$

9,309,734

Allowance for loan and lease losses

238,125

240,710

Money market and investment securities

2,149,658

2,138,037

Intangible assets

50,436

50,583

Deferred tax asset, net

307,599

311,263

Total assets

12,714,370

12,573,019

Deposits

9,434,780

9,338,124

Borrowings

1,371,183

1,381,492

Total preferred equity

36,104

36,104

Total common equity

1,710,421

1,685,779

Accumulated other comprehensive income (loss), net of tax

2,642

(27,749

)

Total equity

1,749,167

1,694,134

Table 6 - Loan Portfolio

Composition of the loan portfolio including loans held for sale at
period-end.

(In thousands)

As of

March 31,

December 31,

2016

2015

Residential mortgage loans

$

3,330,945

$

3,344,719

Commercial loans:

Construction loans

146,129

156,195

Commercial mortgage loans

1,524,491

1,537,806

Commercial and Industrial loans

2,343,416

2,407,996

Commercial loans

4,014,036

4,101,997

Finance leases

230,801

229,165

Consumer loans

1,555,560

1,597,984

Loans held for investment

9,131,342

9,273,865

Loans held for sale

37,868

35,869

Total loans

$

9,169,210

$

9,309,734

Table 7 - Loan Portfolio by Geography

(In thousands)

As of March 31, 2016

Puerto Rico

Virgin Islands

United States

Consolidated

Residential mortgage loans

$

2,562,348

$

325,326

$

443,271

$

3,330,945

Commercial loans:

Construction loans

61,178

61,756

23,195

146,129

Commercial mortgage loans

1,200,153

71,948

252,390

1,524,491

Commercial and Industrial loans

1,815,470

113,612

414,334

2,343,416

Commercial loans

3,076,801

247,316

689,919

4,014,036

Finance leases

230,801

-

-

230,801

Consumer loans

1,463,043

48,021

44,496

1,555,560

Loans held for investment

7,332,993

620,663

1,177,686

9,131,342

Loans held for sale

35,745

354

1,769

37,868

Total loans

$

7,368,738

$

621,017

$

1,179,455

$

9,169,210

(In thousands)

As of December 31, 2015

Puerto Rico

Virgin Islands

United States

Consolidated

Residential mortgage loans

$

2,575,888

$

327,976

$

440,855

$

3,344,719

Commercial loans:

Construction loans

63,654

69,874

22,667

156,195

Commercial mortgage loans

1,208,347

69,773

259,686

1,537,806

Commercial and Industrial loans

1,876,143

173,916

357,937

2,407,996

Commercial loans

3,148,144

313,563

640,290

4,101,997

Finance leases

229,165

-

-

229,165

Consumer loans

1,506,773

48,430

42,781

1,597,984

Loans held for investment

7,459,970

689,969

1,123,926

9,273,865

Loans held for sale

33,787

507

1,575

35,869

Total loans

$

7,493,757

$

690,476

$

1,125,501

$

9,309,734

Table 8 – Non-Performing Assets

(Dollars in thousands)

March 31,

December 31,

2016

2015

Non-performing loans held for investment:

Residential mortgage

$

172,890

$

169,001

Commercial mortgage

182,763

51,333

Commercial and Industrial

137,896

137,051

Construction

54,036

54,636

Consumer and Finance leases

27,351

30,752

Total non-performing loans held for investment

574,936

442,773

OREO

142,888

146,801

Other repossessed property

11,339

12,223

Total non-performing assets, excluding loans held for sale

$

729,163

$

601,797

Non-performing loans held for sale

8,079

8,135

Total non-performing assets, including loans held for sale (1)

$

737,242

$

609,932

Past-due loans 90 days and still accruing (2)

$

184,890

$

163,197

Allowance for loan and lease losses

$

238,125

$

240,710

Allowance to total non-performing loans held for investment

41.42

%

54.36

%

Allowance to total non-performing loans held for investment,
excluding residential real estate loans

59.23

%

87.92

%

(1)

Purchased credit impaired loans of $172.3 million accounted for
under ASC 310-30 as of March 31, 2016, primarily mortgage loans
acquired from Doral Bank in the first quarter of 2015 and from
Doral Financial in the second quarter of 2014, are excluded and
not considered non-performing due to the application of the
accretion method, under which these loans will accrete interest
income over the remaining life of the loans using estimated cash
flow analysis.

(2)

Amount includes purchased credit impaired loans with individual
delinquencies over 90 days and still accruing with a carrying
value as of March 31, 2016 of approximately $25.9 million,
primarily related to loans acquired from Doral Bank in the first
quarter of 2015 and from Doral Financial in the second quarter of
2014.

Table 9 - Non-Performing Assets by Geography

(In thousands)

March 31,

December 31,

2016

2015

Puerto Rico:

Non-performing loans held for investment:

Residential mortgage

$

148,338

$

147,975

Commercial mortgage

167,226

34,917

Commercial and Industrial

132,324

131,450

Construction

11,857

11,894

Finance leases

2,136

2,459

Consumer

23,379

26,329

Total non-performing loans held for investment

485,260

355,024

OREO

130,181

133,121

Other repossessed property

11,290

12,115

Total non-performing assets, excluding loans held for sale

$

626,731

$

500,260

Non-performing loans held for sale

8,079

8,135

Total non-performing assets, including loans held for sale (1)

$

634,810

$

508,395

Past-due loans 90 days and still accruing (2)

$

175,987

$

154,915

Virgin Islands:

Non-performing loans held for investment:

Residential mortgage

$

16,258

$

14,228

Commercial mortgage

9,723

10,073

Commercial and Industrial

5,572

5,601

Construction

42,179

42,590

Consumer

474

471

Total non-performing loans held for investment

74,206

72,963

OREO

5,255

5,458

Other repossessed property

11

32

Total non-performing assets, excluding loans held for sale

$

79,472

$

78,453

Non-performing loans held for sale

-

-

Total non-performing assets, including loans held for sale

$

79,472

$

78,453

Past-due loans 90 days and still accruing

$

8,171

$

8,173

United States:

Non-performing loans held for investment:

Residential mortgage

$

8,294

$

6,798

Commercial mortgage

5,814

6,343

Construction

-

152

Consumer

1,362

1,493

Total non-performing loans held for investment

15,470

14,786

OREO

7,452

8,222

Other repossessed property

38

76

Total non-performing assets, excluding loans held for sale

$

22,960

$

23,084

Non-performing loans held for sale

-

-

Total non-performing assets, including loans held for sale

$

22,960

$

23,084

Past-due loans 90 days and still accruing

$

732

$

109

(1)

Purchased credit impaired loans of $172.3 million accounted for
under ASC 310-30 as of March 31, 2016, primarily mortgage loans
acquired from Doral Bank in the first quarter of 2015 and from
Doral Financial in the second quarter of 2014, are excluded and
not considered non-performing due to the application of the
accretion method, under which these loans will accrete interest
income over the remaining life of the loans using estimated cash
flow analysis.

(2)

Amount includes purchased credit impaired loans with individual
delinquencies over 90 days and still accruing with a carrying
value as of March 31, 2016 of approximately $25.9 million,
primarily related to loans acquired from Doral Bank in the first
quarter of 2015 and from Doral Financial in the second quarter of
2014.

Table 10 – Allowance for Loan and Lease Losses

Quarter Ended

(Dollars in thousands)

March 31,

December 31,

March 31,

2016

2015

2015

Allowance for loan and lease losses, beginning of period

$

240,710

$

228,966

$

222,395

Provision for loan and lease losses

21,053

33,633

32,970

Net (charge-offs) recoveries of loans:

Residential mortgage

(6,960

)

(4,877

)

(5,094

)

Commercial mortgage

(529

)

(1,967

)

(3,730

)

Commercial and Industrial

(3,479

)

(2,824

)

(3,895

)

Construction

(74

)

(4

)

(398

)

Consumer and finance leases

(12,596

)

(12,217

)

(16,184

)

Net charge-offs

(23,638

)

(21,889

)

(29,301

)

Allowance for loan and lease losses, end of period

$

238,125

$

240,710

$

226,064

Allowance for loan and lease losses to period end total loans held
for investment

2.61

%

2.60

%

2.38

%

Net charge-offs (annualized) to average loans outstanding during the
period

1.03

%

0.95

%

1.25

%

Provision for loan and lease losses to net charge-offs during the
period

0.89x

1.54x

1.13x

Table 11 – Net Charge-Offs to Average Loans

Year Ended

March 31, 2016

December 31,

December 31,

December 31,

December 31,

(annualized)

2015

2014

2013

2012

Residential mortgage

0.84

%

0.55

%

0.85

%

4.77

%

(7)

1.32

%

Commercial mortgage

0.14

%

3.12

%

(1)

0.84

%

3.44

%

(8)

1.41

%

Commercial and Industrial

0.59

%

1.23

%

(2)

2.13

%

(5)

3.52

%

(9)

1.21

%

Construction

0.18

%

1.42

%

(3)

2.76

%

15.11

%

(10)

10.49

%

Consumer and finance leases

2.79

%

2.85

%

3.46

%

2.76

%

1.92

%

Total loans

1.03

%

1.65

%

(4)

1.81

%

(6)

4.01

%

(11)

1.74

%

(1) Includes net charge-offs totaling $37.6 million associated
with the bulk sale of assets. The ratio of commercial mortgage net
charge-offs to average loans, excluding charge-offs associated
with the bulk sale of assets, was 0.77%.

(2) Includes net charge-offs totaling $20.6 million associated
with the bulk sale of assets. The ratio of commercial and
industrial net charge-offs to average loans, excluding charge-offs
associated with the bulk sale of assets, was 0.38%.

(3) Includes net charge-offs totaling $3.3 million associated with
the bulk sale of assets. The ratio of construction net charge-offs
to average loans, excluding charge-offs associated with the bulk
sale of assets, was (0.52)%.

(4) Includes net charge-offs totaling $61.4 million associated
with the bulk sale of assets. The ratio of total charge-offs to
average loans, excluding charge-offs associated with the bulk sale
of assets, was 1.00%.

(5) Includes net charge-offs totaling $6.9 million associated with
the acquisition of mortgage loans from Doral Financial in the
second quarter of 2014. The ratio of commercial and industrial net
charge-offs to average loans, excluding charge-offs associated
with the acquisition of mortgage loans from Doral, was 1.95%.

(6) Includes net charge-offs totaling $6.9 million associated with
the acquisition of mortgage loans from Doral in the second quarter
of 2014. The ratio of total net charge-offs to average loans,
excluding charge-offs associated with the acquisition of mortgage
loans from Doral, was 1.74%.

(7) Includes net charge-offs totaling $99.0 million associated with
the bulk loan sales. The ratio of residential mortgage net
charge-offs to average loans, excluding charge-offs associated with
the bulk loan sales, was 1.13%.

(8) Includes net charge-offs totaling $54.6 million associated
with the bulk sale of adversely classified commercial assets and
the transfer of loans to held for sale in the first quarter of
2013. The ratio of commercial mortgage net charge-offs to average
loans, excluding charge-offs associated with the bulk sale of
adversely classified commercial assets and the transfer of loans
to held for sale, was 0.45%.

(9) Includes net charge-offs totaling $44.7 million associated with
the bulk sale of adversely classified commercial assets. The ratio
of commercial and industrial net charge-offs to average loans,
excluding charge-offs associated with the bulk sale of adversely
classified commercial assets, was 2.04%.

(10) Includes net charge-offs totaling $34.2 million associated
with the bulk loan sales and the transfer of loans to held for
sale. The ratio of construction loan net charge-offs to average
loans, excluding charge-offs associated with the bulk loan sales
and the transfer of loans to held for sale, was 2.91%.

(11) Includes net charge-offs totaling $232.4 million associated
with the bulk loan sales and the transfer of loans to held for
sale. The ratio of total net charge-offs to average loans,
excluding charge-offs associated with the bulk loan sales and the
transfer of loans to held for sale, was 1.68%.